tv Nightly Business Report PBS March 7, 2012 4:30pm-5:00pm PST
captioning sponsored by wpbt >> susie: apple takes the wraps off its newest ipad. it offers faster wireless, high- definition video, and it costs the same as its predecessor. >> reporter: i'm erika miller outside an apple store in manhattan. the ipad 3 may be getting a lot of attention, but don't write off the competition just yet. i'll have the story. >> tom: and with gas prices heading sky high, the head of shell oil tells us why he's focused on alternative energy. it's "nightly business report" for wednesday, march 7. this is "nightly business report" with susie gharib and tom hudson.
"nightly business report" is made possible by: >> susie: good evening, everyone. the new apple ipad is here, and its called, simply, the new ipad. it's faster and flashier, and, tom, there will certainly be long lines to buy it. >> tom: susie, it goes on sale next friday, march 16, but apple is accepting order already. now, the entry level price is sa as the current versions, $499.
the unveiling of the hotly- anticipated ipad took place in san francisco today. the new tablet is decked out with a sharper screen, a faster processor-- twice the speed of the ipad 2-- and has an improved camera that can record h.d. video. the updated version will be the first ipad to use the 4g wireless technology. >> susie: so what does this new souped-up device mean for rival tablet makers like amazon and blackberry maker research in motion? erika miller reports. >> reporter: it seems hard to believe that the ipad is only two years old, and it currently dominates the market. but don't count out the competition just yet. analyst david garrity says the ipad's biggest threat is amazon's kindle fire, which costs less than $200. >> amazon, in terms of digital content and services, is more than a match for apple. and also, as a competitor, amazon has shown historically that they are willing to accept very low margins. >> reporter: so far, samsung tablets haven't made much
inroads, but garrity isn't giving them up foread. >> youertaly wl beeein moreroducts comi up from samsung. and sooner or later, they'll find a way to get it right. >> reporter: some industry experts think e-readers like the nook and kindle touch will eventually be phased out, but not cnet's maggie reardon. >> there are a lot of people who want a device that has one specific purpose. i think there's a really big market for that, so i think we will continue to see e-readers. >> reporter: blackberry's playbook is another matter. >> blackberry is barely a blip in the whole tablet market. i think they have long way to go. >> reporter: t big unknown is whether microst will tip the apple cart when it releases windows 8 later this year. 90% of computers run windows, so windows 8 tablets will make it easier to share information across platforms. but one big hurdle all rivals face is apple's vast ecosystem, including over 500,000 apps and products that work seamlessly together. >> once you have a library on
itunes-- whether its music, whether its video, whether its other types of applications or content-- it's very difficult trying to move that over to a non-apple device. some people would say it's almost impossible. >> reporter: and don't forget that apple enjoys fanatical brand loyalty, so getting those customers to switch from the ipad won't be easy. erika miller, "nightly business report," new york. >> tom: forte as an analyst joins us briefly from the faz dak. tom, we have a new ipad, the ipad 3 we'll call it. keeping up the growth rate. can it keep up the growth rate we've seen? >> i think the answer is yes, can keep up the growth rate. there's anoer innovation with a better resolution screen sxrktsd ability t and th on 4 g network that the enable apple to keep apple share, and continue its growth. >> tom: let's talk about that
market share. in 2010 they had 94% penetration. at the end of last year it was cut to 58%. of course, the overall pie has grown significantly. what does it need to do to continue to maintain that market share? >> to me, i think a lotf pressure willome from underneath and from above. underneath, the kendall fire for 199, and to that, offering the whole generation ipad 2 at a lower price point will help in that regard, and the pressure from above is the ultra book. i don't think there's another premium tablet that can compare to the ipad, but to the extenlt you can get a lightweight computer for under a thousand dollars, that puts it in the box. >> tom: and continue to manufacture and sell those, but cut the price to maintain the share. who loses in all of this? you mentioned the nook, and the kendall from amazon.
it comes from other manufacturers outside much barnes and noble and amazon. a $200 difference between the ipad, and the kindle and nook is enough to motivate the consumer to buy the less expensive device. i would argue that motorola and some of the other tablet device mufacre codgive up market to apple. >> tom: the apple ipad 4 g runs 429, and if you buy the new ipad or perhaps one share of apple? >> well, if you're giving me that share, it's hard to pass up one share of apple >> tom: is that right? >> yeah. >> tom: you have a price target? >> our price target is under review. our prior price target was 575 to 595. and it's likely to go higher. >> tom: do you own apple? >> i don't own shares. >> tom: do you own an ipad?
>> i do. >> susie: stocks close higher just one day after posting their biggest losses this year. helping things higher, word that a number of european banks have signed on to the greek debt swap, and, here in the u.s., a robust reading on the job market. a.d.p., the big payroll processing firm, says 216,000 jobs were added at u.s. businesses in february. the labor department issues its take on february this friday. most economists see a rise of 243,000 jobs. wall street was ceainly enthusiastic; the dow rose 75 points, the nasdaq added 20, and the s&p was up eight. >> tom: still ahead: from big losses yesterday to gains today, tonight's "street critique" guest says market volatility is here to stay. money manager kyle harrington joins us. >> susie: oil prices followed stocks higher today. in new york trading, april crude rose $1.46 to $106 a barrel while gas prices averaged $3.76 a gallon nationwide.
despite rising prices at the pump, a new study says the energy sector could become a huge economic driver this year. i.h.s. cambridge energy research associates says the sector grew more than three times the overall u.s. economy last year. diane eastabrook is in houston where oil experts from around the globe are talking about energy security and fueling the future. diane? >> reporter: susie, much of the growth the energy industry is enjoying in the u.s. at least is from natural gas. shell oil is the world's second largest oil and gas company, and today i spoke with company president marvin odum. he started our conversation by telling me how shale gas in the u.s. is literally transforming his business. >> it was only a few years ago that in north america and the u.s. primarily, the question was around how many regasification terminals should we build to bring
natural gas into this country from other parts of the world. there's been so much gas found with new technology in the u.s. and in canada, now the question is should webe exporting gas or not. that's a political debate still happening and will happen over the next several years, i presume. >> you have liquefied natural gas terminals all over the world, but none in the u.s. are you planing on building in the u.s. soon? >> probably the largest lng -- we're the largest lng player out there on a global basis. we look at the north american market and say the fundamentals are here for liquefied natural gas export to other parts of the world. we think that likely happens first in can da because canada needs less of that natural dz itself. it's primed for export because of the iement of resources found in the u.s. are pretty astounding as well. i think the real political
debate will be do we export liquefied natural gas from the u.s. shell is looking at those projects and evaluating those and pushing very hard on one in canada. and pushing in >> there's been opposion to drilling in theunited states, is that a problem going forward? >> it is a problem and a valid problem, because there's a lot of real concerns out there about what does this development to to quality of water and in terms of air emissions. i think those are growing pains, because when you get down to the science and the facts, and a real explanation of how this business ought to be developed you get to a comfort level that those issues are okay, and we can deal with thoseissue fist we do this the right way. >> susie: there'sñr been a lot of chatter about the united states becoming energy
independent, and in fact, when newt gingrich won the georgia primary, we talked about the united states becoming more energy independent. do you think that is likely to happen in the foreseeable future? >> totally independent? i don't know if it can, and i'm not sure that's actually the goal. but can we make an enormous dept in the amount of energy imported into this country -- and by an enormous dent, i mean make more of ourselves and get all the benefit that is go with it, the jobs and improvement in the trade balance and security of supply and so forth. the answer to that is absolutely yes. does that mean over time replacing half of our imports or three quarters or a hundred percent? maybe. we need to pursue the tune now. it's an enormous opportunity in the country. >> oil is still a huge part of shell's business in the united states. odum told me later this year the company pls to start a new project just o e as alask
>> susie: say the name "molson coors" and you think beer. now there's a new twist... with tea. the company is coming out with coors light iced tea. it will be test marketed in canada in april before coming to the u.s. when i met with c.e.o. peter swinburn today, i asked him what's the idea behind the new beer. >> it's a great combination. the world's most refreshing beer gets aligned with the most refreshing non-alcoholic
drink. but there's two things together, and you have refreshment. that's what it's all about. >> susie: what does it taste like? is it sweet? >> it tastes, and has overtones of tea. it's tea with over tones of beer. and without alcohol. >> you bought a company that makes cider. why were you interested in that? >> it's part of the overall strategy in our portfolio to make sure we're satisfying consumer needs. and it's very small in terms of volume, but they like the idea of a different long alcoholic drink that's refreshing and very crisp. >> susie: you're moving into the special flavors. who are you targeting? what type of consumer? >> regular beer drinkers that wanted a difference now and again. and also targeting people that don't normally drink beer.
for whatever reason -- and also trying to target on occasion summertime refreshment >> susie: we all know that people are drinking more wine and cocktails. how are you dealing with that? introducing more flavors? >> we're going to concentrate on making our core brand relevant. that drives our profit. branlds like coors light or miller lite in the u.s. take all of our focus. >> susie: how is the beer business doing? >> in most markets it's a challenge. but our job, quite simply is to increase earnings and margeibs, and the core brand, and innovate around the brand, and also expand internationally as well into new markets. >> susie: how are you dealing with the drop off in business? >> we concentrate on the core brands and also that's innovation as well. we have to make sure the brands are elvant. coors lite and miller lite, we're bringing out alum newt
pints keep the freshness in, and for miller light, a can which allows you to make the beer come out of the can some more moogtly. >> susie: aren't those something easily copied by competitors? >> they can be copied, but it department matter, because you're bringing value to the consumer, and the consumer recognizes that, and they're willing to pay for it. >> it's a much better way -- >> susie: and the emerging markets like china and india and other places? what kind of growth due expect there? >> well, we focus where we can make a big difference. china is the biggest beer market in the world. india is the fastest growing. russia is a very big beer market. ukraine is the second biggest beer market in eastern europe. we're not going to put a lot of money behind breweries or capital in. but we'll put a lot of money behind branding. >> susie: and to what extent does bad news and good news
about jobs and gasoline prices impact business? >> it does impact. our core consumer, when you narrow is down, is a legal age drinking male to 29 years old, and unemployment for that category is twice the national average. there's not much we can do about it. that's why we concentrate on the things we can affect. >> susie: tom, despite the challenges, the company recently reported quarterly earnings that surged 58%. and today the stock rose slightly, ticker symbol "t-a-p" here on the big board. >> tom: interesting take on the core consumer for the silver bullet and maybe into the new ice tea beer as well. we did see a little stock rebounds today. let's get you updaepted on tonight's market focus. stocks were able to rebound a bit after yesterday's route. buyers stepped into the rket from the opening bell and were steady throughout the session. optimism is building that greece
will have enough lenders agree to take a loss by tomorrow's deadline, and the strong private payroll jobs data helped. nine of the ten major stock sectors were up. two of the worst sectors yesterday were a couple of the best today. financials and industrials were up by at least 1%. consumer discretionary stocks also added 1%. conglomerate general electric helped push the dow and s&p 500 higher. shares gained 2% on heavier than usual volume. the companadded to the market optimism by sticking with its 2012 financial forecast. drug giant pfizer has been looking to sell its animal health business since july. today we learned that swiss drug maker novartis has made an offer for as much as $16 billion, according to the "wall street journal," but the bid was rejected. pfizer shares didn't move much on the news, up only 0.5% as the company may decide instead of selling the animal health business, it would spin it off. pfizer launched this strategy last summer to shed this business and its nutrition
operation as a way to focus on its re drug-making busins. meanti, novais shares add a fraction, but they have seen some sharp selling over the past three weeks since announcing a voluntary recall of hundreds of thousands of a high blood pressure medicines due to a possible mix-up of the tablets. internet radio operator pandora hit some sour notes today over worries about its growth rates. shares lost a quarter of their value after releasing a disappointing outlook for the quarter and entire year. with rising costs, investors are concerned about if the company's subscriber and advertiser growth can keep pace. all this came after reporting a bigger than feared quarterly loss. whilgo prices rose a little today, a couple of gold miners continued to see selling pressure. freeport mcmoran and newmont mining fell. the indonesian government cut how much foreign investors can own of mineral and coal mines, from 80% down to less than half, 49%. it could be foreign mining companies will have to gradually
sell part of their stakes. both newmont and freeport have interests in indonesian mines. we saw oil refining stocks heat up while crude oil and gasole were higher. tesoro jumpe4% after reivi an analyst upgrade to neutral from bank of america merrill lynch, expecting shares to benefit from the price differences between crude oil and gasoline-- in other words, the profit margin. fellow refiner valero was up as well, rising more than 7%. this is valero's highest price since late may. volume doubled on the rally. in commodities, we continued to see selling in the grain markets, where corn fell another 2%. wheat was down 3%. and that's tonight's "market focus."
>> tom: three trends expected to continue until election day so says tonight's guest. we welcome kyle harrington. kyle, it's nice to see you. >> h are you? >> tom: i'm well. volatility is back for everybody, including investors, but dividend stocks, do you think theeral seover? >> i think with volatility comes opportunity, and yes, a lot of people have poured money into the dividend paying arena. but we think you feed to be more diligent about picking the appropriate securitys in that marketplace and/or the mutual funds that dignitary their ibvestment philosophy to dividend paying stocks. >> tom: always looking for income. and you're finding it in kimberly-clark. it has had aice rally from theow 60s the low 70s since september:ism right.
>> tom: still pays the yield, what's left? >> 39 years in a row this company has raised its dividend, and the brand that you would recognize as kleenex -- in recessions and boom times people need toilet paper and need to use consumer products. so we think it's a staple of the economy t. has worldwide diversification in terms of the investor base. we like it. >> tom: what do you anticipate of the stock price from the low 70s. >> a move to the mid to high 70s. not a big move, but -- >> tom: time frame? >> three to six months. >> and we like to be rewarded by a dividend. >> tom: and you like intel which pays a dividend close to 3%. >> you could have picked this up in the fall below 20. could be a volatile stock being in technology, could >> could be.
15 billion in cash on the sheets. warren buffet owns the stock. we like the trade. we think the 3% dividend end, and the technology sector will continue to be the sector that drives the entrepreneurship in this country for a portion of one portfolio. we like to own it. >> tom: kimberly-clark and intel, do you and your incestors own it? >> yes. >> tom: what's the holding time frame frr the stock? >> it depends on each individual's risk toleran. everybody's risk tolerance is different. when we go into securities it's a minimum of three months sometimes we hold a stock for two years. >> tom: there you go. you can e-mail street critique at nbr.com, and our guest from the nasdaq was kyle harrington. >> reporter: i'm darren gersh. treasury secretary timothy geithner heads to dallas to talk up the economy and visit one of warren buffett's biggest bets. i'll have an exclusive interview tomorrow.
>> susie: and finally, how about a movie night? redbox, the dvd movie rental kiosk company, is offeri a free dvd rental tomorrow, march 8. redbox says it's a thank you to its customers for two billion movie rentals. all you have to do is enter the promo code "thanks-2-u" at the kiosk. that's the word "thanks," the number 2 and the letter "u." and susie, if you're wondering, redbox's two billionth rental was the movie "drive," starring ryan gosling. >> 2 billion movies, and i've fallen asleep in the first 30 seconds for mest of om. >> susie:ot this one >> tom: that's nightly business report for this evening, wednesday, march 7th. we want to remind you this is the time of year your public television station seeks your support. >> susie: support that makes programs like "nightly business report" possible. >> tom: thanks for joining us. and don't forget to support your public television station. i'm tom hudson. good night, everyone. you, too, susie >> susie: good night, tom. i'm susie gharib. we'll see all of you again tomorrow evening.
>> tom: i'm tom hudson with a "nightly business report" news brief. apple unveiled its hotly- anticipated ipad 3 today, called the new ipad. the new tablet is decked out with a sharper screen, a faster processor and works on faster wireless networks from a.t.&t. and verizon. startingrice: $499. the dogains 78oints, the nasd rallied 25, and the s&p 500 was up nine points. >> reporter: i'm darren gersh. treasury secretary timothy